EXHIBIT 2.2
AMENDMENT TO
ASSET PURCHASE AGREEMENT
THIS AMENDMENT TO ASSET PURCHASE AGREEMENT (this "Amendment"), dated as of
November 1, 1999 by and among Pediatric Services of America, Inc., a Delaware
corporation ("PSA"), Paramedical Services of American, Inc., a California
corporation ("PSA SUB") and Xxxxxx Xxxxxx, Inc., a New York corporation
("Purchaser"). All capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Agreement as hereinafter defined.
W I T N E S S E T H:
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WHEREAS, PSA, PSA SUB and Purchaser are parties to an asset purchase
agreement dated as of August 30, 1999 (the "Agreement"), pursuant to which
Purchaser agreed to purchase from PSA and PSA SUB, certain of the assets and
properties of PSA, PSA SUB and their affiliates which principally relate to the
Business;
WHEREAS, Purchaser, PSA and PSA SUB have determined, as provided in Section
1.2(b) of the Purchase Agreement, that the "Performance Adjustment", as
described in Section 1.2(b), must be made to the Purchase Price;
WHEREAS, Purchaser, PSA and PSA SUB have determined that because the
Estimated Accounts Receivable is $12,000,000, a reduction of $4,000,000 must be
made to the Purchase Price as provided in Section 1.2(d) of the Agreement;
WHEREAS, the parties have agreed to make certain amendments to the
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties do hereby mutually agree as follows:
1. Section 1.2(a) of the Agreement is hereby deleted in its entirety and
replaced with the following:
(a) In consideration for the Assets, Purchaser shall pay to PSA SUB
Eighty-Five Million Dollars ($85,000,000), subject to the adjustments
set forth in Section 1.2(b), as amended below, Section 1.2(d) of the
Agreement (the parties agree that the adjustment in the purchase price
required by Section 1.2(d) shall be a reduction of Four Million
Dollars ($4,000,000)), and Section 1.2(e) of the Agreement (the
"Purchase Price"), plus the Assumed Liabilities.
2. Section 1.2(b) of the Agreement is hereby deleted in its entirety and
replaced with the following:
(b) Purchaser shall deposit Ten Million One Hundred Eighty-Seven
Thousand Five Hundred Dollars ($10,187,500) of the Purchase Price
into an escrow account (the "Escrow Account") at First Union National
Bank, Richmond, Virginia (the "Escrow Agent"), pursuant to an escrow
agreement in substantially the form attached hereto as Exhibit 1.2(b)
(the "Escrow Agreement"), which shall be distributed pursuant to such
Escrow Agreement by the Escrow Agent as follows:
(i) In the event that PSA delivers to Purchaser the Audited
Financial Statements and related report of Ernst & Young LLP (the
"Auditor") on or before 5:00 p.m. EST on December 17, 1999, then
Purchaser, PSA and PSA SUB shall jointly direct the Escrow Agent as
required to effect the transfer to PSA SUB of Three Million Dollars
($3,000,000). In the event that PSA does not deliver to Purchaser the
Audited Financial Statements and related Auditor's report on or before
5:00 p.m. EST on December 17, 1999, then Purchaser, PSA and PSA SUB
shall jointly direct the Escrow Agent as required to effect the
transfer to Purchaser of Three Million Dollars ($3,000,000). The
parties acknowledge that the PMI 1997 Financial Statements have been
delivered;
(ii) In the event that PSA has delivered to Purchaser the
Audited Financial Statements and related Auditor's report on or before
5:00 p.m. EST on February 15, 2000, then to the extent that the net
revenues of the Business for its 1999 fiscal year as reflected in the
Audited Financial Statements are less than Eighty Million Dollars
($80,000,000), Purchaser, PSA and PSA SUB shall jointly direct the
Escrow Agent to transfer to Purchaser One Dollar ($1) for every One
Dollar ($1) that such revenues are less than Eighty Million Dollars
($80,000,000), provided, however, that the amount to be distributed to
Purchaser pursuant to this clause shall not exceed Five Million
Dollars ($5,000,000); in the event that the net revenues of the
Business for its 1999 fiscal year, as reflected in the Audited
Financial Statements exceed Seventy-Five Million Dollars
($75,000,000), then Purchaser, PSA and PSA SUB shall jointly direct
the Escrow Agent to transfer to PSA SUB One Dollar ($1) for every One
Dollar ($1) that such revenues exceed Seventy-Five Million Dollars
($75,000,000), provided, however, that the amount to be distributed to
PSA SUB pursuant to this clause shall not
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exceed Five Million Dollars ($5,000,000); in the event that the
Audited Financial Statements and related Auditor's report have not
been delivered on or before 5:00 p.m. EST on February 15, 2000, then
Purchaser, PSA and PSA SUB shall jointly direct the Escrow Agent to
transfer to Purchaser Five Million Dollars ($5,000,000);
(iii) Purchaser, PSA and PSA SUB shall jointly direct the Escrow
Agent to distribute One Million Five Hundred Thousand Dollars
($1,500,000) to: (A) PSA SUB, if Purchaser requests and receives, no
later than 5:00 p.m. EST on February 15, 2000, a consent of the
Auditor to Purchaser's use of the Audited Financial Statements and
related Auditor's report in any of Purchaser's registration statements
and/or any amendments thereto filed with the Securities and Exchange
Commission (the "Auditor's Consent"); or (B) PSA SUB, if Purchaser
does not request the Auditor's Consent prior to 5:00 p.m. EST on
February 8, 2000; or (C) to Purchaser, if Purchaser requests the
Auditor's Consent on or prior to February 8, 2000 and does not receive
the Auditor's Consent by 5:00 p.m. EST on February 15, 2000;
(iv) No later than June 1, 2000, Purchaser, PSA and PSA SUB shall
jointly direct the Escrow Agent to distribute Six Hundred Eighty-Seven
Thousand Five Hundred Dollars ($687,500) in the manner described in
Exhibit A attached hereto;
(v) Simultaneously with the distribution to Purchaser, PSA or PSA
SUB of any funds from the Escrow Account, Purchaser, PSA and PSA SUB
shall jointly direct the Escrow Agent to distribute to the party
receiving such funds any interest or income earned on such funds. All
interest or income earned on funds in the Escrow Account paid to
Purchaser for repayment to Contract Affiliates in accordance with
Exhibit A hereto shall be distributed to PSA SUB simultaneously with
the distribution of such funds from the Escrow Agent; and
(vi) With respect to the dates and events identified in the above
clauses as conditions to the distribution of any funds from the Escrow
Account, Purchaser, PSA and PSA SUB shall jointly direct the Escrow
Agent, within five Business Days of the date or the completion of the
event identified, to distribute such funds.
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3. Section 3.5 of the Agreement is amended by adding thereto the
following final sentence:
"Provided that PSA SUB's net revenues for its 1999 fiscal year,
as reflected in the Audited Financial Statements, are equal to or
greater than Seventy Million Dollars ($70,000,000), then to the
extent that the Audited Financial Statements prepared in
accordance with Securities and Exchange Commission Staff
Accounting Bulletin No. 55 ("SAB 55") differ from the Unaudited
Financial Statements solely as a result of SAB 55, the Audited
Financial Statements shall control and supercede the Unaudited
Financial Statements, but only to the extent that any such
difference resulted from SAB 55, and the representations and
warranties contained in this Agreement and the schedules thereto
shall be modified accordingly."
4. Section 4.6 of the Agreement is hereby amended by replacing the
reference to "Within five (5) Business Days of availability, and in no
event later than five (5) Business Days prior to the Closing," with
"No later than 5:00 p.m. EST on February 15, 2000."
5. Section 4.10(b) of the Agreement is hereby amended by deleting the
section in its entirety.
6. Section 6.7 of the Agreement is hereby amended by deleting the phrase:
"on the Closing Date" in the third line thereof, and replacing it with
the following phrase: "within five (5) Business Days of Purchaser's
receipt of a copy of the Audited Financial Statements and related
Auditor's report from PSA".
7. Article 6 of the Agreement is hereby amended by inserting the
following new section at the end thereof:
6.9 Escrow Agreement. On or before the Closing Date, Purchaser, PSA
and PSA SUB shall enter into an Escrow Agreement substantially in the
form of Exhibit 1.2(b) hereto.
8. Section 7.3(i) of the Agreement is hereby amended by deleting the
section in its entirety.
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9. Section 1.6(a) of the Agreement is hereby amended by deleting "11:59
p.m. on the Closing Date" and replacing it with the following: "00:01
a.m. on November 1, 1999."
10. The definition of "Effective Time" in the definition section of the
Agreement is hereby amended by deleting the definition in its entirety
and adding in the following: "Effective Time" means 00:01 a.m. on
November 1, 1999.
11. Except as expressly amended in this Amendment, the Agreement shall
continue in full force and effect in accordance with the provisions
thereof prior to the effectiveness of this Amendment.
12. This Amendment shall become effective as of the date first written
above.
13. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO
THE CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF.
14. This Amendment may be executed by one or more of the parties hereto on
any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same
instrument.
IN WITNESS WHEREOF, Purchaser, PSA, and PSA SUB have caused this Amendment
to be signed by their respective officers thereunto duly authorized all as of
the date first written above.
"Purchaser:"
XXXXXX XXXXXX, INC.
By:
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Name:
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Title:
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[Signatures continued on next page]
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"PSA:"
PEDIATRIC SERVICES OF AMERICA, INC.
By:
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Xxxxxx X. Xxxxxxx
Chief Executive Officer
"PSA SUB:"
PARAMEDICAL SERVICES OF AMERICA, INC.
By:
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Name:
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Title:
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